General Trading Risk
Trading financial markets is a high-risk activity. The value of financial instruments can go up as well as down and you may receive back less than you invest. There is no guarantee of profit and losses can be significant.
The following general risks apply to all forms of trading and investment in financial markets:
- Market risk — prices can move rapidly and unpredictably due to economic events, news, central bank decisions, and market sentiment
- Liquidity risk — in certain market conditions it may be difficult or impossible to execute a trade at your desired price
- Volatility risk — some markets, particularly cryptocurrency, can experience extreme price movements in short periods
- Execution risk — there may be delays between placing an order and its execution, resulting in a different price than expected (slippage)
- Technology risk — platform outages, internet connectivity issues, or software failures can prevent you from entering or exiting trades
- Psychological risk — emotional decision-making including fear, greed, and revenge trading significantly increases the risk of loss
You should only ever trade or invest money that you can afford to lose entirely without it affecting your standard of living, financial commitments, or mental wellbeing. Do not trade with borrowed money, credit cards, savings required for essential expenses, or funds set aside for emergencies.
Leveraged and Margin Trading
Many of the trading instruments discussed on Signal Marketplace, including forex, CFDs, and futures, involve the use of leverage or margin. Leveraged trading amplifies both potential gains and potential losses.
With 1:30 leverage, a 3.3% adverse move in the market will result in a 100% loss of your deposited margin. With 1:100 leverage, a 1% adverse move achieves the same result. Losses can exceed your initial deposit with some brokers and instruments.
- Margin calls — if your account equity falls below the required margin level your broker may close your positions automatically at a loss
- Negative balance — while many brokers offer negative balance protection, this is not universal. You may owe your broker money beyond your deposit in some circumstances
- Overnight financing — holding leveraged positions overnight or over weekends incurs swap or financing charges which erode profitability over time
- Gap risk — markets can open significantly higher or lower than they closed, resulting in losses larger than your stop loss intended
The FCA limits retail client leverage to 1:30 for major forex pairs and lower for other instruments. These limits exist to protect retail traders. Trading with a broker that offers higher leverage to UK residents may mean that broker is not FCA regulated and your funds may not be protected.
Risks by Asset Class
Different asset classes carry different risk profiles. The following summarises the key risks associated with each major asset class available on Signal Marketplace.
Highly liquid but subject to extreme volatility around economic data releases, central bank decisions, and geopolitical events. Leverage amplifies risk significantly. Currency pairs can move hundreds of pips in seconds.
Prices driven by supply and demand, geopolitical events, weather, and macroeconomic factors. Gold and oil can experience sharp moves. Seasonal patterns do not guarantee future price behaviour.
Represent baskets of stocks and can fall sharply during economic downturns or market crashes. Correlation with global events means diversification may not protect against systemic risk.
Extremely high volatility. Assets can lose 50 to 90 percent of their value in short periods. Largely unregulated. Subject to exchange failures, hacks, regulatory bans, and market manipulation. Not suitable for inexperienced traders.
Cryptocurrency assets are not covered by the Financial Services Compensation Scheme (FSCS). If a cryptocurrency exchange fails or is hacked, your assets may be lost with no recourse. Only invest in cryptocurrency what you are fully prepared to lose entirely.
Trading Signals, Bots, and Strategies
Signal Marketplace allows independent third-party providers to list trading signals, automated bots, strategies, courses, and indicators. The following risks apply specifically to these products and services.
- No guarantee of profitability — no signal service, bot, or strategy can guarantee profitable results. Market conditions change and what worked in the past may not work in the future
- Provider independence — all sellers on the Platform are independent third parties. Signal Marketplace does not employ, supervise, or take responsibility for their conduct or results
- Performance data — win rates, ROI figures, and drawdown statistics displayed on listings are provided by sellers and have not been independently verified by Signal Marketplace. Such figures may be based on backtesting, cherry-picked results, or favourable market conditions that may not recur
- Automated systems — trading bots and EAs operate without human intervention. A software bug, connectivity issue, or unexpected market event can cause significant unintended losses. Always monitor automated systems closely
- Copy trading risk — copying another trader's positions means you are exposed to their risk appetite, position sizing, and decision-making, which may not be appropriate for your own financial situation
- Subscription costs — the ongoing cost of signal subscriptions must be factored into profitability calculations. A service that appears profitable may not be after subscription fees are deducted
Before purchasing any signal service, bot, strategy, or course on Signal Marketplace, you should conduct thorough due diligence. Review track records and supporting evidence, ask questions through the messaging system, start with trial access where available, and never allocate significant capital to an unproven service.
Past Performance Warning
Past performance is not indicative of future results. This is one of the most important principles in financial markets and applies to every signal, strategy, bot, indicator, and piece of content on this Platform without exception.
- A strategy that produced strong returns last year may perform poorly or lose money this year due to changing market conditions
- Backtested results are based on historical data and benefit from hindsight. They do not account for real-world factors such as slippage, spread widening, broker requotes, and emotional decision-making
- Short track records of a few months are not statistically significant and should not be used as the primary basis for a purchasing decision
- A high win rate does not mean a strategy is profitable. A strategy with a 90% win rate but a poor risk-reward ratio can still lose money overall
- Drawdown figures may understate the true risk of a strategy, particularly if the track record does not include a major adverse market event
Backtested performance shown in listings or platform tools including the Signal Marketplace backtest simulator is hypothetical and for educational purposes only. Hypothetical results have many inherent limitations and do not represent actual trading results. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
No Financial Advice
Signal Marketplace is a technology platform. We are not authorised or regulated by the Financial Conduct Authority (FCA) or any other financial regulatory body in the UK or elsewhere.
Nothing on Signal Marketplace constitutes:
- Financial advice or investment advice of any kind
- A personal recommendation to buy, sell, or hold any financial instrument
- A financial promotion as defined by the Financial Services and Markets Act 2000
- Portfolio management or discretionary investment management
- Any other regulated financial service under UK law
The content, signals, strategies, tools, news, and educational materials available on this Platform are provided for informational and educational purposes only. They should not be relied upon as the basis for any trading or investment decision.
Before making any trading or investment decision you should seek independent financial advice from a qualified, FCA-authorised financial adviser who can assess your individual financial circumstances, risk tolerance, investment objectives, and knowledge and experience of financial markets. You can find an authorised adviser at the FCA register at fca.org.uk/register.
Before You Start Trading
If you are new to trading or considering purchasing a signal service or strategy, we strongly recommend working through the following checklist before committing any capital.
The FCA provides free guidance for retail investors at fca.org.uk. MoneyHelper offers free, impartial financial guidance at moneyhelper.org.uk. If trading losses are causing you financial hardship or mental health difficulties, please seek help from a qualified professional.